Min Ding
Executive Summary
Standard consumer theory assumes that consumers make decisions to maximize their overall (singular) utility. However, many qualitative theories across disciplines (e.g., psychology, medicine, marketing, artificial intelligence) posit the existence of multiple selves (i.e., inner preferences) within each person and argue that a decision is the result of complex interactions among multiple selves (that often entail resolving conflicts). The familiar American folk expression "An angel on one shoulder and a devil on the other" exemplifies this school of thought by capturing a person who is pulled in opposite directions by two conflicting preferences (the angel on one shoulder tells him or her to do one thing, and the devil on the other shoulder tells him or her to do the opposite).
In this article, the author proposes a theory of intraperson games (TIG) to incorporate this school of thoughts in a formal quantitative framework. Building on social welfare literature and standard (multi-person) game theory, the TIG defines two types of intraperson players: the efficiency agent, who attempts to maximize the total utility for the entire set of selves residing in a person’s mind, and the equity agent, who strives to balance the utilities received by each of these selves. The TIG states that individual decision is the outcome of the strategic interaction between the efficiency agent and the equity agent. Thus, standard consumer utility theory is a special case of TIG if the role of the equity agent is ignored. The author applies TIG to variety-seeking-type behavior and demonstrates that such behavior can be explained as an equilibrium outcome of an intraperson game.
The author identifies precise conditions in which a person seeks variety and then validates key theoretical insights from this applied model in an empirical study. This new understanding has important managerial implications. A firm launching a new product into a market (or a firm with a small market share) might want to encourage more variety-seeking behavior, whereas a dominant firm probably wants to discourage it. Firms also may want to turn variety-seeking consumers into loyal consumers if possible. With the new framework based on the TIG, which indicates which individual consumers are likely to seek variety, managers have more specific guidelines regarding how to influence consumers’ choice behavior.
Biography
Min Ding is Assistant Professor of Marketing in the Smeal College of Business at Pennsylvania State University. He received his PhD in Marketing from the Wharton School of Business, University of Pennsylvania, and his PhD in Molecular, Cellular, and Developmental Biology from Ohio State University. Min's research interest is new product development at both the customer level and the firm level. His work at the customer level centers on designing incentive-aligned mechanisms that elucidate customers' preferences for new products. At the firm level, his research focuses on helping firms improve their new product development decision making, especially decisions related to high-risk, high-return industries, such as the ethical drug industry. Min has published in leading journals, such as Management Science, Journal of Marketing Research, and Journal of Marketing, and is on the editorial board of Production and Operations Management and Journal of Business-to-Business Marketing.
Journal of Marketing, Vol. 71, No. 2, April 2007
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